Friday recorded a relatively strong drop as the price was rejected from levels above the 100EMA but this weekend has recovered almost all of Friday’s decline and looks set for a move higher. Since the 10% gain from this week as reported here, the price has mainly been trading in a range from about the $7300 level to $7500 with resistance at $7550.

There is a strong case to be made for the current price action forming a bull flag as it trades in this range. Another close above the 100EMA would be a bullish sign and a strong statement by the market that Bitcoins price should be valued above this point. In the case of a close above the 100EMA, bullish momentum may be enough to break through the $7550 resistance and come up to the $7850 mark. This case is seen as likely with Friday’s drop looking like a higher low, which is an indication of an uptrend.

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If a move up to the $7850 price occurs, the next significant move after that could be to the downside or the upside. We have seen price blasting through the $6850 point this week so the same could happen at $7850. On the other side, $7850 has been a significant point of trading activity in the past, and any big traders (known as whales) that maintain a bearish viewpoint should achieve sufficient liquidity here to take short positions which would put a lot of downward pressure on the price.

Bitcoin Daily

On the hourly chart, we can see the price is trading above the 50, 100, & 200EMA. As anticipated in yesterday’s post, the 200EMA is currently trading around the $7100 mark which analysts predict will act as support if a movement to the downside occurs.

Bitcoin Hourly

Key Takeaways:

A Bull Flag pattern in play and appears as if a higher low was priced in on Friday, both bullish signs signaling future movement to the upside.

Weekend gains have retraced all the losses of Friday.

Resistance at $7550 but a close above the 100EMA will make it more likely that this level is broken.

Significant trading activity to be expected at $7850.

In the event of a movement to the downside, $7100 and hourly 200EMA is expected to act as support.

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After discovering bitcoin in 2015, John fell down the cryptocurrency rabbit hole and was swallowed whole. He made the move to lovely Lisboa at the start of 2018 and started working with cryptocurrencies and blockchain full-time.